Reassessment order passed under Section 148A(d) beyond cut-off date is invalid and time-barred.

By | September 26, 2026
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Reassessment order passed under Section 148A(d) beyond cut-off date is invalid and time-barred.

Issue

Whether a reassessment order passed under Section 148A(d) on 28.07.2022 under the new regime, following an initial notice issued on 30.06.2021 under the old regime, is time-barred and legally unsustainable as it fell beyond the cut-off date of 01.04.2021 for Assessment Year 2015-16.

Facts

  • Assessment Year: The subject matter pertained to Assessment Year 2015-16.
  • First Notice (Old Regime): The Revenue issued the initial reassessment notice on 30.06.2021 under the pre-amended provisions (old regime) of Section 148.
  • Subsequent Proceedings (New Regime): Following statutory regime transitions, an order under Section 148A(d) was subsequently passed by the Assessing Officer on 28.07.2022 under the amended provisions (new regime).
  • Time-Bar Challenge: The assessee challenged the validity of the proceedings on the ground that the order under Section 148A(d) was issued well after the prescribed cut-off date of 01.04.2021, rendering the entire exercise time-barred.

Decision

  • Reassessment Time-Barred: The court held that the reassessment order passed under Section 148A(d) on 28.07.2022 was executed well past the statutory cut-off threshold of 01.04.2021.
  • Exercise Unsustainable: The entire reassessment exercise initiated and finalized beyond the applicable limitation periods was completely out of time and legally unsustainable.
  • Relief Allowed: The reassessment proceedings were set aside in favor of the assessee.

Key Takeaways

  1. Strict Adherence to Statutory Timelines: Reassessment proceedings conducted under Section 148A must comply strictly with the limitation periods prescribed under Section 149 of the Income-tax Act.
  2. Post Cut-Off Orders Are Void: Reassessment orders under Section 148A(d) passed beyond the permissible statutory cut-off dates cannot survive in law and are liable to be quashed as time-barred.
HIGH COURT OF MADRAS
Appnell Holdings Ltd.
v.
Deputy Commissioner of Income-tax, International Taxation
SUSHRUT ARVIND DHARMADHIKARI, CJ.
and G. Arul Murugan, J.
WA No. 2740 of 2026
CMP No. 24154 of 2026†
SEPTEMBER  7, 2026
Allwin Godwin and Rahul Yadav for the Appellant. Avinash Krishnan Ravi, Junior Standing Counsel for the Respondent.
JUDGMENT
Sushrut Arvind Dharmadhikari, CJ.- The present appeal is directed against the order dated 13.07.2026 passed in W.P.No.1513 of 2023.
2. By the impugned order, the learned Single Judge dismissed the appellant’s challenge to the re-assessment notice for the Assessment Year 2015-16 and the consequential order issued under Section 148A(d) of the Income Tax Act, 1961 as also the Instruction of the Central Board of Direct Taxes dated 11.05.2022, holding that the proceedings were initiated within the period of limitation.
3. The issue raised in this writ appeal is whether the reassessment notice issued to the appellant for the Assessment Year 2015-16 is barred by time.
4. Similar issue was considered by this Court in Shanmugha Arts, Science Technology and Research Academy v. ACIT (Exemptions)  (Mad)/W.A.No.1925 of 2026 Vide judgment dated 16.07.2026, the writ appeal was allowed on the ground that when the first notice was issued on 12.04.2021 and the subsequent notice under Section 148A(b) was issued on 31.03.2022 culminating in the order dated 02.05.2022 and since all these steps pertaining to the Assessment Year 2015-16 were taken well after the cut-off date of 01.04.2021, the entire re-assessment exercise is clearly out of time and completely unsustainable in law. The said judgment in W.A.No.1925 of 2026 is reproduced below:
“This appeal is directed against the order dated 3.6.2026, passed by the learned Single Judge in W.P.No.29752 of 2023. By the impugned order, the learned Single Judge dismissed the appellant’s challenge to the reassessment notices and the consequential order issued under the Income Tax Act, 1961, holding that the proceedings were initiated within the period of limitation.
2. The issue raised before us is whether the reassessment notices issued to the appellant for the Assessment Year 2015-2016 are barred by time.
3. At the threshold, learned Additional Solicitor General submitted that the statutory boundary lines for reopening past assessments were comprehensively examined by the Supreme Court in Union of India v. Rajeev Bansal 2024 SCC Online SC 2693. He drew our attention to paragraph 19(f) of the decision in Rajeev Bansal (supra), wherein the Supreme Court explicitly recorded the stance of the Revenue regarding the specific timeline applicable to the Assessment Year 2015-2016. It was acknowledged that for the Assessment Year 2015-2016, any notice issued on or after 1.4.2021 must be dropped, as such actions would not fall for completion during the period prescribed under the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA).
4. Learned Additional Solicitor General fairly conceded that the controversy in the present appeal is squarely governed by the aforesaid decision of the Supreme Court. It is admitted that since the underlying dispute relates to the Assessment Year 2015-2016 and all notices were issued after 1.4.2021, the same will not survive the test of limitation and must be dropped.
5. In the present case, the first notice was issued on 12.4.2021, and the subsequent notice under Section 148A(b) of the Act was issued on 31.3.2022, culminating in the order dated 2.5.2022. Since all these steps pertaining to the Assessment Year 2015-2016 were taken well after the cut-off date of 1.4.2021, the entire reassessment exercise is clearly out of time and completely unsustainable in law.
6. As a sequel, the appeal is allowed. The impugned order passed by the learned Single Judge dated 3.6.2026 is set aside. The notices dated 12.4.2021 and 31.3.2022 as well as the order dated 2.5.2022 are hereby quashed.
There shall be no order as to costs. Connected interim application stands closed.”
5. In the present case, the first notice was issued on 30.06.2021 under the old regime and thereafter, the impugned order under Section 148(1)(d) was passed on 28.07.2022 under the new regime, which is well after the cut-off date of 01.04.2021. Therefore, the issue is squarely covered by the aforesaid decision of this Court in this Court in W.A.No.1925 of 2026.
6. In view of the above, this writ appeal is allowed and the impugned order of the learned Single Judge dated 13.07.2026 is set aside. The notice issued pursuant to the aforesaid proceedings also stands quashed. There shall be no order as to costs. Consequently, the interim application stands closed.